The case of the two municipalities of Estonia

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Dagmar Kutsar Avo Trumm

Provision of social assistance

The case of the two municipalities of Estonia

Social Policy and Social Exclusion in the Baltic Countries

Fafo

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Dagmar Kutsar Avo Trumm

Provision of social assistance

The case of the two municipalities of Estonia

Social Policy and Social Exclusion in the Baltic Countries

Fafo-paper 2003:1

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Introduction

Social reintegration has been stressed by several world organisations (UN, ILO, EU) and focused on in several scientific discussions. It is proposed that the European Commission make an Annual Social Cohesion Impact Statement, and that a social impact statement should be included in all new policy proposals. “Social exclusion is a reality in Europe and will pose a growing threat to social stability and further integration if not counteracted. Europe must therefore continue to reach out to people in need”,” declared Tom Johannesen, Secretary General of the International Federation of Social Workers, in his NGO Report dated June 1997.

On 12 May 2000, the European Committee for Social Cohesion (CDCS) adopted its Strategy for Social Cohesion. This document, approved by the Committee of Ministers on 13 July, represents a statement of intent setting out a precise agenda for the Council in the social field for the coming years. It does not define social cohesion as such, but instead seeks to identify some of the factors of social cohesion such as:

• setting up mechanisms and institutions which will prevent divisive factors (such as an excessive gap between rich and poor, or multiple forms of discrimination) from becoming so acute as to endanger social harmony;

• the importance of decent and adequately remunerated employment;

• measures to combat poverty and social exclusion, particularly in areas such as housing, health, education and training, employment and income distribution and social services;

• strengthening social security systems;

• developing policies for families, with particular emphasis on children and the elderly;

• partnership with civil society bodies, in particular trade unions, employers’ representa- tives and NGOs

(Strategy for Social Cohesion. European Committee for Social Cohesion. Cf. http://www.coe.int/T/E/

social_cohesion/, reference made on 28 November 2002)

The European Council agreed at the Nice Summit in December 2000 that Member States be requested to implement two-year National Action Plans on Social Inclusion for com- bating poverty and social exclusion, setting specific targets, taking into account national, regional and local differences, and listing the indicators used to assess progress.

The concept of sustainable human development has become topical in countries of rapid societal change as a result of a growing gap between society and the individual and losses in social and human capital as an outcome. The power structures can accept the dangers caused by the losses of social and human capital, but at the same time, support for long-term strat- egies for sustainable human development has actually been exchanged for merely dealing with current acute problems.

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The restoration of independence in Estonia has created potential grounds for democratic participation and its institutional carriers in Estonia. Major changes have taken place in basic economic, social and political understandings, as well as in the relationships between people, in demands made of the labour force, etc. As a result, development from a totalitarian command economy into a market economy with democratic participation has been a rapid but painful process endangering sustainable human development in the country and creating poverty as well as social exclusion.

The Estonian Human Development Report 1997 points out the dangers of decreasing cohesion of Estonian society and the need for the reintegration of society, stressing the urgency required to reach out to people who are involuntarily excluded and disadvantaged.

In 2001, a new metaphor referring to “two Estonias” was the subject of much debate among the population. The first Estonia is formed by the wealthy, socially integrated part of the population, the ‘winners’, while the other, opposing part of the population has to cope with the high risks of poverty and exclusion and are known as ‘losers’. To integrate the ‘second’

Estonia with the ‘first’ needs a number of ‘bridge-building’ measures from both sides (cf.

Øyen, 1997). One of these measures involves clearly developing the social security system, including social assistance provisions to those in need. The need for social assistance has grown rapidly together with the processes of social differentiation.

The new social, economic and political situation of the country has encouraged the government to initiate shifts in the social protection system. The transition from a totalitarian command system to a democratic civil society has been paved with several unpopu- lar decisions made by politicians. Today, the main structures of new social policies are more or less established in Estonia, but there is a lot of disillusionment and dissatisfaction among the population. Estonia as an accession country to the EU and represented by the Estoni- an government has taken responsibility for formulating the Joint Inclusion Memorandum and started revising a National Action Plan of Social Inclusion.

The aim of the current paper is to evaluate the impact of developments in social assist- ance provisions from two perspectives: (1) the capacity of public social protection in general by relieving social problems; and (2) the administrative capacity of social assistance provisions, with special emphasis on local municipal and social workers as the main pro- viders of social assistance.

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Background to the study

Theoretical point of departure and social evidence

Social cohesion and dissociation form two poles of social integration. Cohesion is reflected by high functionality and developmental capacities in a society, creating accessibility to mainstream society for everyone. Social dissociation refers to social disintegration processes, such as decreasing functionality, with social exclusion forming an important part of this.

‘In its literal sense, social cohesion is all about what binds societies together. All societies are the result of an interplay between centripetal and centrifugal forces; the things that bring people together and the things that drive them apart; the forces of unity and the forces of division; the interests of the individual and the interests of the community. All societies have to try to arrive at a workable means of accommodating these forces. Conflict is a necessary and permanent feature of life in society; it is not, therefore, a matter of creating a permanent balance of forces, but more a question of managing a dynamic equilibrium. The challenge, in other words, is to create societies that can manage conflict and change constructively and creatively.’ (Strategy for Social Cohesion. European Committee for Social Cohesion Cf. http://www.coe.int/T/E/

social_cohesion/, reference made on 28 November 2002)

Social exclusion can be characterised as a decrease in capacities and the detachment of so- cial and human capital in relation to the exposure of power and influence. Social exclusion can be found in every society. At the same time, it is especially clear-cut in transitional societies, including Estonia. As a rule, losses in social and human capital are costly. Conse- quently, it is better if losses are kept to a minimum. The objective conditioning of social exclusion is connected with rapid societal transition processes and changing social welfare systems. Subjectively, it is caused by an involuntary loss of welfare resources and the inabil- ity to restore the previous situation. The status of the socially excluded can be subjectively perceived as alienation, disillusionment, powerlessness to control and change the situation.

The Norbalt Living Conditions Survey (1994) revealed that different social groups run varying risks of social exclusion (Kutsar, 1997). In many cases, social exclusion stems from the loss of a job as a negative life event and is followed by the individual’s failure to return to the labour market. The socially excluded lack welfare resources in ‘having’, ‘loving’ and

‘being’ dimensions as defined by Erik Allardt (1975). The Norbalt (1994) survey revealed that the accumulation of risks of social exclusion is more likely among people in older age groups, those with lower levels of education and those belonging to minority ethnic groups.

Data from the Household Income and Expenditure Surveys of the Estonian Statistical Office have shown a slight improvement in the poverty rate in the country. In 1996, 36%

of households were living below the poverty line, including 19% living in direct poverty (80% of the poverty line). By 2000, the proportion of those living in direct poverty had fallen to 15%, but still no fewer than a quarter of households had resources which did not

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reach the poverty line. At the same time, the proportion of people living at risk of poverty (20% above the poverty line) grew from 18% of households in 1996 to 20% in 2000. A lack of economic resources holds people back from social activity but also affects personal growth, so endangering the development of human capital in general.

Social practice from the 1990s has shown that social exclusion divides Estonia region- ally into ‘successful’ and ‘not so successful’ (possibly one of the criteria for the creation of the ‘two Estonias’ metaphor). The successful regions are more often major cities and county centres, while the rural periphery and also some small monofunctional settlements are deemed to be not so successful (cf. Kutsar & Trumm, 1999). It is possible to see the division of regions. At the periphery, the processes of social economic marginalisation (high unemployment rates, including a large number of long-term unemployed and discouraged people) and the acute need for social assistance provision are evident.

Social capital is one of society’s resources, revealed in collective actions taken by people, in mutual collaboration and in functional informal networks. According to Francis Fuku- yama (1995), social capital is a social norm that allows co-operation between two or more individuals and can be observed as group cohesiveness. Low levels of social capital in a society, according to Fukuyama, lead to political dysfunction, such as the centralisation of administrative power (as in the case of France) or an unresponsive political system (as in the case of Italy). Political centralisation weakens local governments and gives way to growing evidence of corruption.

Poverty and social exclusion pose risks to social capital as they both decrease trust between different sectors of the population. On the other hand, living in a transitional society with high levels of mobility between social strata, ’individuals’ lifeskills’ strengths and weaknesses (cf. Nelson-Jones, 1993) – take on crucial importance in allowing people to cope with everyday life. This is particularly the case when we compare with the situation in more stable and developed societies, where ’individuals moving between different social strata is supported by a range of universal social skills that help them to form flexible new social networks (Lauristin, 2001).

Individuals who live on welfare contributions cannot retain high levels of trust towards other people. Their focus of control remains outside of them and is in the hands of others in the form of decisions made about their ’life situations and socio-political regulations of social protection which are made without their participation. This kind of situation also destroys social capital as a personal expression of the norm of joint actions.

European Values Surveys (1990 and 1999, cf. Saar Poll, 2001) have revealed decreasing trust between people in Estonia. In 1999, only 23% of respondents claimed they could trust the majority of people (in Sweden, this figure was 58%, in Finland 66%, and in Latvia even less than in Estonia – 17%). The survey also revealed that Estonian society has moved away from liberalist market economic thinking and action towards a social market economy, viewing it as more desirable. Social participation is low, and many people do not belong to any of the listed voluntary organisations. Saar Poll also found that people feel a sense of alienation from the state and are not interested in politics. The Norbalt II Living Condi- tions Survey in 1999 (Marksoo et al., 2001) showed that social participation and trust in institutions as preconditions for social capital are weak and linked to the personal economic performance of respondents. Of respondents in the first income quintile, only 30% had

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trust in Parliament (Riigikogu), and 29% trusted the government; in the fifth quintile, the respective figures were perceptibly higher – 51% and 47% respectively.

Social security

The market, the state and civil society – all these institutions have a clear-cut role in social integration as well as in alleviating social exclusion and creating conditions for empower- ing social capital in the country. The state is responsible for the formulation and implementation of the relevant social protection schemes, the market enables the creation of new opportunities as well as new risks, and civil society deals with several aspects of social jus- tice and solidarity. The concept of solidarity (as another expression of social capital) forms a powerful vehicle for social integration, meaning its common social values and the social order constructed around it.

From the socio-political point of view, there are a number of opportunities to alleviate social exclusion and promote social integration, starting from common security provided by the state and followed by full application of the culture of individual opportunities. Recent developments in Estonia have confirmed that there is a growing need for mediating institutions between the state, the market and the individual, such as centres for the promotion of entrepreneurial spirit, local activation centres and social welfare offices providing the needy population with social assistance.

The security afforded by state social provisions appears to depend on three factors: adequacy, accessibility and affordability (Duffy, 1998). In this context, adequacy refers to the minimum standards offered, and to the proportion of the needy population who are covered; accessibility means the complexity of regulations, their eligibility and implementation; while affordability refers to the ability of both individuals and households to purchase goods and services and the cost of providing these.

There are specific rules on implementing social protection measures that may impact in a discriminative manner on some social groups in particular. For example, unemployed people who have not registered at the labour office as unemployed will not be offered training and courses or nor have the right to health insurance in Estonia.

By transferring responsibilities from the state to local government level, regulations come closer to people. This seemingly functional situation poses several risks should the resources for redistribution fail to be adequate enough. As a result, at the periphery and in other problematic areas with high risks of social exclusion (high unemployment, poverty, low educational level among the population, etc.), the redistribution of resources cannot fol- low the needs of those with acute problems with coping.

State social security provisions. In Estonia, the State plays a key role in creating social se- curity for its citizens. The state social security system operates according to the principles laid down in the Social Welfare Act and various regulations of the Ministry of Social Af- fairs. This is the traditional hierarchical model of social security administration, the formal bureaucratic division of statuses and respective roles within the social security system (Figure 1, overleaf ).

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The functioning of this model assumes clear subordination between the levels of action, where Parliament passes the laws and formulates political ideologies, the government pro- vides guarantees with policies and regulations that are implemented at a local government level, and social workers are the main implementers of laws, policies and regulations in re- spect of helping individuals and/or households to cope. This system can work if (1) there is a collective understanding of social security objectives and tasks among those concerned and the levels of action; (2) there is a clear organisational structure of social security provisions with balanced role division, and (3) there is a system of monitoring and evaluation.

State authorities bear overall responsibility for social security, while the private and civil sectors hold only a complementary position. However, the social security mechanisms in Estonia are implemented through different structures and bear different concepts at the same time, as can be revealed further in this study.

The perspectives of social policy in Estonia for the period 2000-2010 have been settled by the Ministry of Social Affairs and approved by the Decree of the Minister of Social Affairs, No. 129 dated 20 April 2000 (Cf. http://www.sm.ee/introduction.html, reference made on 20 May 2002). The strategy plan of the Ministry of Social Affairs is an important strategy document presenting the long and short-term objectives and what needs to be done to achieve them. The main strategic objectives for 2000-2010 by sector are as follows.

Strategic objectives of the labour sector, 2010

• as much employment as possible for people of working age;

• interests of both parties at work protected fairly;

• safe, employee-friendly working environments.

Figure 1. Formal hierarchical model of social security administration in Estonia

Ideology Parliament

Policy Government Regulations Municipality

Implementation Social worker

The target subject

Social problems (unemployment, poverty, exclusion)

Social political response

MARKET CIVIL SOCIETY

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Strategic objectives of the health sector, 2010

• a population noticeably more knowledgeable on health at individual, community and professional level;

• a restructured, cost-effective health network based on future needs analyses;

• a quality-assured, well-informed, motivated health network that can learn;

Strategic objectives of the social welfare sector, 2010

• a stable social insurance system that covers all the traditional social risks;

• a well-balanced system of social benefits that encourages people to work and promotes independent coping;

• a network of social services that is based on recipient needs, motivates and promotes independent coping.

The perspectives of social policy in Estonia are as expected of an accession country by the European Union and bear the ideals of social Europe.

Social work – the forgotten sphere of activity in Estonia

In a way, social inequality has become more rife in Estonian society, the loss of human and social capital has become evident, the social protection system has gone through serious reconstruction, and social work is returning to professional status. The reinvention of social work as a profession and as a field of knowledge found its way back to society when Estonia restored its independence and started to look for new ways of development. New social problems, such as unemployment, poverty, homelessness, social exclusion, increasing delinquency and drug abuse, which were becoming more widespread, reflected the acute social demand for skilled and educated social workers. Today, there are a number of colleg- es and universities where social work is taught as a major subject.

The social worker, in the new professional sense, has a number of parts to play – as a creative listener, bookkeeper, lawyer, advisor, inspector, teacher, friend and – sometimes – mother. As one social worker with whom we worked together in a focus group said – ‘the job of the social worker has widened so much, and now we deal with all kinds of problems in everyday life – from the cradle to the grave’.

Social workers in a transitional society such as Estonia are developing their professional identity and expanding their field of knowledge. They spend lot of time searching the In- ternet for new regulations and studying new laws concerning not only social policy but also entrepreneurship, land and property restitution, labour market regulations and so on and so forth. They work with one ‘client’, be it an individual, a family, a group at risk, or a whole community. And they are confronted daily with oppression and deprivation and fight against the risk of personal burnout.

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The world as a whole is becoming more and more complicated, uncovering new social problems and risks to the survival of mankind. As a response to these changes, the context of social work is also in rapid flux. But one fundamental element remains the same; name- ly that social work is located within some of the most complicated arenas of human expe- rience, impacted upon by social difficulties that affect different individuals, households or social groups with varying severity.

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The study

Problem context of the current study

Ten years after the collapse of the Soviet Union, the main structures of new social policies are more or less established in Estonia. The main cornerstones of this long-term process have been the taxation reform (establishing the independent budget for social protection costs), the implementation of contemporary health and pension insurance systems (in order to increase individual contributions and responsibility), the launch of means-tested social assistance (providing relief for unemployment, poverty and social exclusion), community work and social services. Absolute social expenditure, as well as people’s individual “share”

of the GDP, is increasing.

However, there is still no clear understanding of the aims, tasks and regulations of social security. This particular feature is characteristic of most countries in transition. Janos Kornai (1997: 277) asks: “Where can the post-communist states look for a model of an efficient welfare state?”

Mart Laar, former Prime Minister of Estonia, has stated: “We will develop a welfare society, but we do not want to copy the welfare patternsthat our Nordic neighbours have developed”.”

According to Kornai (1997:277), the debate on welfare reform in the post-communist countries is a shambles. It has taken place on various planes: among politicians, within and between political parties, between finance ministries and the ministries responsible for managing the welfare sector, among opposing pressure groups, and among various schools of thought in the academic world. Reforms all too often reflect compromises between dia- metrically opposed principles or embody no guiding principle whatsoever.

Table 1. Positive and negative factors regarding the implementation of various welfare regimes in Estonia (Lauristin, 1997).

a i n o t s E n i s r o t c a f l a i t n e u l f n I

) 0 9 9 1 , n e s r e d n A - g n i p s E o t g n i d r o c c a ( s e m i g e r e r a f l e W

t s i l a i c o

S Liberal Conservative n

o i t a l s i g e

L +/- - +/-

y g o l o e d i l a c i t i l o

P - ++ +

s d r a d n a t s l a n o i t a n r e t n

I ++ +/- +/-

s n o i t i d a r t d n a s e u l a

V -/+ - ++

) s e i t r a p ( s t s e r e t n i l a c i t i l o

P - + +

s d e e n l a i c o

S ++ - +

s t s e r e t n i r e y a p x a

T - ++ +

t n e m n r e v o

G -/+ - +

s e c r u o s e r e v i t a r t s i n i m d

A + - +/-

s e c r u o s e r c i m o n o c

E - + +

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Despite the fact that all post-communist states are searching for their own national welfare mix, the current outcome of the reforms is similar throughout Central and Eastern Europe.

Ferge (1999) points out the following features:

• the role of the (central) state in social policy is deliberately reduced in all its former functions as owner, service provider and donator of funds;

• the wide ranging welfare activities of companies – be they state firms or newly emerging private enterprises – are disappearing, often with valid reasons;

• local authorities have regained their relative independence and have become responsible for the well-being of their citizens. This is a major gain of democratisation, although some new problems will have to be solved;

• the re-emergence of the voluntary and NGO sector is also a major gain, even if its role is not always clear and funding remains a problem;

• many functions executed formerly by collective (central or local) bodies are falling back on the family or community. While theoretically this may improve the quality of services, in reality it may overburden the new executors.

In short, universality as a basic principle is practically disappearing in post-communist countries. This process may be manifest (formal dismissal of particular benefits) or – and more often – latent (permanent devaluation of benefits). The latter can be seen in Estonia as well (Table 2).

While many transition countries cannot maintain the system of universal benefits in- herited from the Soviet era, adopting a targeted policy entails many risks (Gorniak, 2001;

Milanovic, 1997; World Bank, 1997):

• a system based on strict targeting principles carries high administrative costs and is open to misuse. Groups entitled to benefits may not apply if the system is too complex, while others may question its legitimacy if they feel that they are being punished for not meeting official criteria for eligibility;

Table 2. Dynamics of the actual value of social benefits in Estonia. Estonian kroons

t i f e n e b e c n e t s i s b u

S Unemploymentbenefit Childbenefit f

o e g n a h c f o e t a D

t i f e n e b f o e u l a v e h t

l a n i m o N

e u l a v

l a u t c A

e u l a v

l a n i m o N

e u l a v

l a u t c A

e u l a v

l a n i m o N

e u l a v

l a u t c A

e u l a v 3

9 9 1 . 9 0 .

2 280 280 180 95 90 48

4 9 9 1 . 0 1 .

1 320 210 180 63 105 36

6 9 9 1 . 1 0 .

1 320 153 180 45 130 33

6 9 9 1 . 2 0 .

1 390 180 180 44 130 32

7 9 9 1 . 1 0 .

1 460 195 180 40 150 34

7 9 9 1 . 1 1 .

1 500 192 180 37 150 31

8 9 9 1 . 3 0 .

1 500 182 300 58 150 29

9 9 9 1 . 1 0 .

1 500 177 400 76 150 28

0 0 0 2 . 1 0 .

1 500 171 400 74 150 27

1 0 0 2 . 1 0 .

1 500 162 400 70 150 26

2 0 0 2 . 1 0 .

1 500 153 400 66 150 25

Source: Kuddo et al., 2002

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• means testing in particular seems impractical in countries in which the extent of the ‘grey economy’ equals or exceeds that of the formal sector;

• this also risks of stigmatising potential recipients who, for that very reason, may not claim their benefits;

• the narrow targeting of benefits involves a risk of targeting errors, such as (1) errors of exclusion – citizens not in need may be entitled to benefits; and (2) errors of inclusion – benefits can be entitled to the non-poor citizens;

• the additional risk to the poor can be seen in the decentralisation of welfare services.

Strong links between the scale of welfare payments and local government budgets could result in a situation whereby some governments provide rather generous benefits but other governments, due to their limited resources, can provide only minimal social assistance.

A situation such as this has been experienced in Estonia, where subsistence benefits were relinked to the central government budget in 1999.

The basic ideology of social security in Estonia is still fluctuating between liberal and socio-democratic values (Figure 2). The legislative framework of social policy bears concepts taken from the Nordic welfare model (equal rights, universalism, central role of the state, etc.), while the mechanisms of implementation are rather similar to the Anglo-American welfare regime. The main challenge, therefore, is to establish the most rational welfare mix.

The position of local governments. As recent developments in the social security system show, the main burden as regards the implementation of social protection in Estonia rests on local governments and social workers. The question still remains as to which types of capital these players cover (the professional skills and professional awareness of social workers and the organisational and monetary capacities of the municipality, along with the co-operation characteristics between various agents and power structure levels).

The legal foundation of the local government system in Estonia is formed by the Con- stitution of the Republic (1992) and the Local Government Organisation Act (1993), which establish the functions, jurisdiction, responsibilities and organisational structure of local authorities – both council and government – along with their relationship with local bodies and the national government. ‘The independent and final resolution and regulation of

Figure 2. Social security system in transition in Estonia: an abstraction

MARKETISM STATEISM

FAMILISM INDIVIDUALISM

Est

1989 Est

2002

Est 2002

?

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local issues’ is the major principle of local authority. Everything considered to be of local importance should be decided locally.

There are 247 units of local government, representing both rural (205) and urban (42) municipalities, and ranging in size from Tallinn, with 427,500 inhabitants, to Ruhnu, with as few as 68. As more than two-thirds of municipalities have a population of fewer than 3,000 people, many of them have found it advantageous to co-operate on the provision of services and implementation of administrative functions.

The increase of local government responsibilities has been hampered by a severe lack of resources. Budgets for local governments are regulated by the Municipal and Town Budg- ets Act (1993) and the Local Taxes Act (1994). These acts are the main source of revenue for local governments: taxes, subsidies from the state budget, income from economic activities (entrepreneurship, income from property, etc.), loans and other revenue. Most of the budget is made up of revenue from taxation. Of all revenue from taxation, personal income tax received through central government taxation¹ is predominant.

Subsidies from the state budget are other major sources of income. The allocations from the state budget to local governments include both general purpose and targeted subsidies.

As targeted subsidies are allocated for implementing specific central government functions which are delegated to local governments, their size and use are taken into account in the state budget. General purpose subsidies are intended to cover the costs of the obligations imposed by legislation. On average, the local government budget per capita amounted to EEK 5,557 in 1999.

While the basic concepts are provided by the law regulating local governments, special laws (such as the Elementary and High School Act, the Social Welfare Act and the Con- struction and Planning Act) spell out local government tasks more specifically. In addition to the responsibilities assigned to them by law, local governments have the right to take on problems that have not been assigned in legal terms to any other party for decisions or regulation.

The local authorities in Estonia have wide-ranging tasks to do, but these are not made particularly explicit in the various legislative acts and the level of detail varies across sectors. In general, local authorities feel that the legal foundation is unclear and that there are many areas (such as public order, emergency services, social welfare and healthcare) where competencies are shared and unclear.

A number of surveys have referred to the low institutional and administrative capacities of local governments and presented a range of recommendations to improve the situation.

Decisions have been made to implement most of these recommendations within the scope of the administrative reform initiated in 2001.

Research issues of the study. The current study focuses on the provision of social assist- ance at local government level and deals with the following research issues.

• What have been the major shifts in the provision of social assistance in general and at local government level?

• How have implementation mechanisms changed since Estonia became an independent state?

1 The tax shared between the state and local governments is made up of personal income tax (44% state, 56% local) and fees for the use of natural resources (shares vary depending on the resource in question)

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• Who are the vulnerable groups, and how much are they taken into account when it comes to targeting the provision of social assistance?

• What are the major differences in the provision of social assistance between two local governments (one being a ‘loser’, the other a ‘winner’) as two instances of the effects of decentralisation?

• What are the characteristic features of the professionalisation of social work?

The counties of Pärnu (as an example of a successful region) and Jõgeva (an example of a region which is not so successful) – both in terms of sustainability – have been taken as two cases in this study.

Method

The study applied qualitative methods involving in-depth interviews (focus groups and expert interviews). The framework of the interviews was formulated in co-operation with the project partners – the Institute of Applied Social Research of Norway (FAFO) and the Department of Sociology and Social Policy at the University of Tartu.

There were four general areas of focus in the interviews:

1. Developments in the Estonian social protection system in general and in social assistance in particular. This subsection attempted to map the changes in the purpose of social welfare provision, people’s real-life situations, social assistance values, needs and resources, and individuals in need.

2. Organisations, regulations and implementation agencies. This part of the interview analysed the re-adaptation of the implementation mechanisms of social policy to the changed situation in society.

3. Vulnerable groups versus target groups as regards social assistance.

4. The rebirth of social work and the profession of social worker in Estonia. Here, the emphasis was on the professionalisation of social work.

Detailed interview framework – see Appendix 1.

Participants in expert interviews

The experts for the study were selected from a variety of areas and levels of social assistance administration:

1. Head of the Department of Social Insurance and Benefits from the Estonian Ministry of Social Affairs;

2. Head of the Estonian Centre for Social Development;

3. Mayor of the town of Sindi

All the experts who were listed for interview agreed to participate in the study.

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Participants in the focus groups

The members of the focus groups were proposed by the heads of the Social Welfare De- partments of the county governments. In the county of Pärnu, four social workers representing the county government, Pärnu city government, the municipality of Kilingi-Nõmme and the municipality of Sindi took part in a focus group. Seven social workers (from Jõge- va county government, the town of Jõgeva, the parish of Jõgeva, the town of Mustvee, the parish of Pajusi, the parish of Torma and the town of Põltsamaa) took part in a focus group in the county of Jõgeva.

The interviews covered all areas indicated in the interview framework. In the county of Pärnu, the structure of the interview was more formalised, and information for the analy- sis was collected by means of more detailed questions. In Jõgeva, information was gleaned from the answer to the first question asking the social workers to describe one of their most recent working days and followed by the interview framework. The descriptions given were rather detailed and analytical, highlighting the main activities of local social workers, problems occurring, perceived changes in regulations, characteristics of applicants and the role of the social worker in general. All other questions addressed to the focus group attempted to clarify the problems that arose during the interview.

Both focus groups were active, co-operative and inspiring. Participants maintained a positive attitude throughout the interviews. By way of feedback, participants deemed the group work to be effective and useful for their mutual communication and the exchange of experiences and ideas.

Information on the counties of Pärnu and Jõgeva

The two regions of Estonia included in the study – Pärnu and Jõgeva – have different cul- tural, economic and social backgrounds. Both of them have a number of resources for development but are still lagging behind the most developed areas of Estonia, the capital city of Tallinn and its environs.

The county of Pärnu is located in the south-western part of Estonia and is the largest of the 15 counties of Estonia, 4,806 km² in area. This county makes up 11% of Estonian ter- ritory (45,200 km²). Pärnu, the centre of the county, was once a member of the Hanseatic League. Via Baltica is the main highway passing through the county.

The county is made up of 23 local authorities of equal status, including three towns (Pärnu, Sindi and Kilingi-Nõmme) (Figure 3) and 242 rural settlements. The town of Pär- nu is the largest administrative unit, with 51,400 inhabitants. The population of other local authorities is between 590 (Lavassaare) and 5,000 (Audru). As regards the ongoing administrative reform in Estonia, intensive discussions are in progress relating to the future administrative division of the county. The main reason for the change of administrative reform is the low administrative capacity of the current municipalities due to the small population, along with limited economic and social resources. In 2001, the county government of Pärnu presented three different scenarios for an administrative structure for the county of Pärnu: 1) modest reform resulting in 29 municipalities; 2) intermediate reform

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– 11 municipalities; and 3) radical reform, proposing only two municipalities: the city of Pärnu and parish of Pärnu to include all former rural municipalities

The county of Jõgeva is located in the central-eastern part of Estonia. The centre of the county, the town of Jõgeva, is situated about 160 km south-east of Tallinn and 50 km north of Tartu. Up until 1949, the county of Jõgeva was a part of northern Tartu and the county of Viljandi. In 1962, the final borders were set for the Jõgeva region and this is how they remain today, 2,604 km² in area. In 1990, Jõgeva region was renamed the county of Jõgeva.

In terms of administration, the county is divided into ten parishes and three towns, each with equal municipal status (Figure 4). The number of inhabitants in the local communi- ties varies from 6,348 (the town of Jõgeva) to 1,426 (the parish of Pala). The local government populations are somewhat smaller than average for Estonia. According to the recent development plan for the implementation of administrative reform, the current local governments will be reorganised into three municipalities, with administrative centres in Jõ- geva, Põltsamaa and Mustvee.

Socio-demographic structure of the population. The population of Estonia is getting older.

Between 1959 and 2000, the proportion of the population aged over 60 has approximate- ly doubled (Sotsiaaltrendid 2, p. 15); over the same period, the number of children has fallen by 18% (amounting to 17.9% in 2000). The ageing process is more apparent among women (due to their higher life expectancy) and in rural areas (due to migration of young people to the cities).

The Estonian two counties included in the study – Pärnu and Jõgeva – are in 4^th and 12^th position respectively, of fifteen counties, in terms of size of population. Both counties are more or less ‘average’ as regards the age and gender structures of their populations.

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There are about 100,300 people living in the county of Pärnu (comprising 7% of the en- tire population of Estonia). The population density is 21 inhabitants per km², while the Estonian average is 32. Due to the abundance of woods, bogs and marshes, the county is unevenly populated: two-thirds of the population live in Pärnu and its environs. The population is made up as follows: Estonians – 83%, Russians – 12%, other nationalities – 5%.

On average, Estonians account for 64% of people in Estonia. Since the mid-1980s, more people have settled in the county than have left it.

The county of Jõgeva is mainly rural, and the rural population forms 68% of the total population of the county. The same figure for Estonia as a whole is 31%. The ethnic make- up of the population is relatively homogeneous (80% Estonians) compared to the rest of Estonia (65% Estonians). The population is ageing, and 15% of inhabitants are of retire- ment age. The natural increase in the population has been negative since 1994. In 1999, 409 births and 538 deaths were registered. The net migration is negative as well.

Labour market. The labour market situation in the county of Pärnu is rather favourable compared to the Estonian average (Table 3). The level of unemployment is one of the low- est among the Estonian regions, and labour market participation and the employment rate are only slightly less than average for Estonia.

The structure of employment in the county of Pärnu has changed to a remarkable extent over the last few years, first of all following the general pattern of development in the Estonian labour market, with decreasing primary sector and rapidly increasing third sector and increasing numbers of employees in private enterprises. In 1999, 41% of all employed people were working in the service sector.

The employment level in the county of Jõgeva has remained at a decreased level since 1994. Of the population as a whole, only half are active on the labour market and the unemployment rate is higher than the Estonian average (17.3%). The main decrease in employment has taken place in construction and in the primary sector (particularly in agriculture), where the number of employed people fell by a half. The increase in the third sector (32%) is noticeable.

Historically speaking, the county of Jõgeva has always been an agricultural area due to its fertile soil and favourable climatic conditions. In 1989, around three-quarters of all people employed were employed in agriculture. The collapse of agricultural production has led to radical changes in the labour market. As the result of these processes, agricultural produc-

Table 3. Population aged 15–74 by economic status and county (2000), annual average, thou- sands (www.stat.ee).

a v e g õ

J Pärnu Estonia

e c r o f r u o b a L

l a t o

T 16.3 45.4 705.1

d e y o l p m

E 13.6 40.3 608.6

d e y o l p m e n

U 2.8 5.0 96.5

s n o s r e p e v i t c a n

I 13.8 30.0 399.0

l a t o

T 30.1 75.3 1104.1

% , e t a r n o i t a p i c i t r a p e c r o f r u o b a

L 54.3 60.2 63.9

% , e t a r t n e m y o l p m

E 45.1 53.5 55.1

% , e t a r t n e m y o l p m e n

U 17.0 11.1 13.7

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tion has decreased and the relative importance of the service sector has increased. Most of the property of former collective farms has now been privatised, and numerous industrial and service-oriented small and medium-sized enterprises have been formed. However, agriculture still remains the main sector of employment.

Household income. Transitions have had a seriously detrimental impact on the living stand- ards of households in Estonia. Economic decline, hyperinflation, emerging unemployment and the liberalisation of prices have led to rapid pauperisation of the population. The purchasing power of the population started to increase in 1997, when the average disposable income increased by 15.3% and the consumer price index increased by ‘only’ 11.2%. Over the period 1996-1999, purchasing power in Estonia increased by 7% (Sotsiaaltrendid 2, p.

57).

The average income of households in the county of Pärnu is comparable with the average for the country as a whole (94.3% in 1997 and 100% of average in 2000). The county of Jõgeva is one of the poorest regions in Estonia, where the incomes of the population are considerably lower than the average for Estonia in general (72.5% in 1999).

Municipal tax revenues. Taxes are the main source of income for local governments. Most tax revenue is generated from personal income tax (46.5%). Municipal budgets are depend- ent on the wealth (income) of households. In the counties of Pärnu and Jõgeva, the average income tax is lower than average for Estonia (in Jõgeva almost half as much), which reduces the options of local government to do what they have to do. Additional subsidies are provided for poorer regions so as to alleviate the differences in resources. In the county of Jõgeva in 2000, 43% of the total revenue came from the state budget in the form of subsidies (Table 4).

Social assistance in local municipalities is provided by social workers. Their tasks and respon- sibilities are set by the Social Welfare Act and are co-ordinated by the Department of So- cial Welfare of the county government. Subsistence benefits are of prime importance among the various social assistance measures.

Subsistence benefits are awarded to households living below the minimum level of subsistence (EEK 500 per consumption unit) in amounts necessary to guarantee that they reach the minimum level of subsistence. In 2000, more than EEK 300 billion was paid out in subsistence benefits (24% of the total assistance given). Of the resources for subsistence benefits, the county of Pärnu received 3.2% and the county of Jõgeva 4.6%. Of approx.

Table 4. Local budgets revenue (2000), thousand kroons

a v e g õ

J Pärnu Total

s n o o r k , a t i p a c r e p e u n e v e r f o e p y T

e m o c n i t e g d u b l a c o

L 2,267 3,042 3,653

x a t e m o c n i l a n o s r e p h c i h w f

O 1,436 2,074 2,551

t e g d u b e t a t s m o r f s e i d i s b u

S 2,400 1,245 1,101

e u n e v e r l a t o

T 5,563 5,391 5,481

% , e u n e v e r l a t o t m o r f e u n e v e r f o e p y t f o e r a h S

e m o c n i t e g d u b l a c o

L 40.8 56.4 66.7

x a t e m o c n i l a n o s r e

P 25.8 38.5 46.5

t e g d u b e t a t s m o r f s e i d i s b u

S 43.1 23.1 20.1

Source: http://www.stat.vil.ee

The case of the two municipalities of Estonia

Dagmar Kutsar Avo Trumm

Provision of social assistance

The case of the two municipalities of Estonia

Social Policy and Social Exclusion in the Baltic Countries

Fafo

Dagmar Kutsar Avo Trumm

Provision of social assistance

The case of the two municipalities of Estonia

Social Policy and Social Exclusion in the Baltic Countries

Contents

Introduction

Background to the study

Theoretical point of departure and social evidence

Social security

Social work – the forgotten sphere of activity in Estonia

The study

Problem context of the current study

Method

Information on the counties of Pärnu and Jõgeva